From Boomers to Hispanics, Supermarkets Lose CPG Share of Key Consumer Segments


There’s good news and bad news for supermarkets in the latest consumer spending data.

Let’s start with the good.

Just over half of consumers — 51% — are still eating out less today than before the downturn started, and 90% said they’ll continue to do so, according to SymphonyIRI Group’s Times & Trends report on channel migration.

Now for the negative side. Grocers, which retain the biggest sales shares overall, are losing momentum to other retail formats, and the most troubling part is it involves some of the supermarket industry’s most coveted or loyal shoppers, as outlined in the same report.

In the 52 weeks ended in early July, the grocery channel posted a 0.3 point decline in CPG dollar share, which takes in everything from beverages to general merchandise, to a 47.9% share overall. This compared to gains of 0.1 by supercenters to 18.6%, 0.3 by club stores to 10.3%, and 0.1 by dollar stores to 1.9%.

A closer analysis finds three especially important shopper segments in which supermarkets are losing share:

High Income: Supermarkets lost share (-0.9) with shoppers earning more than $100,000 for the 52 weeks ended in mid-April, while drug stores (+0.5), club stores (+0.4) and dollars stores (+0.1) showed gains. How are dollar stores in particular accomplishing this? These retailers have been broadening appeal to wealthier segments with bigger consumables assortments and spruced up stores, Susan Viamari, editor of SymphonyIRI’s Times & Trends, said in an interview.

Hispanics: Supermarkets are giving up share (-0.7) of these shoppers to drug stores (+0.5), dollar stores (+0.2) and club stores (+1.1). Drug stores may be the most surprising winner here. Some have developed special programs aimed at Hispanics, including with products, signage, and health and wellness efforts, Viamari said.

Baby Boomers: This may be the supermarket channel’s most troubling loss (-0.4) because these consumers are supposed to be solidly in the supermarket camp. Yet boomers picked up spending at supercenters (+0.2), club stores (+0.4) and dollar stores (+0.1).

IRI Times & Trends: Channel Migration: Charting a Course on the Voyage for Value

If there’s any light in the tunnel for supermarkets, it may be this: a growing trend to reduced number of shopping trips with bigger basket sizes, Viamari said.

But supermarkets can’t count on that. They need to closely track what alternative channels are doing and consider potential fixes, which are probably different for each of these consumer segments.

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Discuss this Blog Entry 2

Dan Riley ~ The Inspired Grocer (not verified)
on Aug 28, 2012

The share loss you identified in your article is only part of the story. Boomers retiring, the grow of both earning and purchasing power of the Gen Y'ers, (whom have an antipathy for 'old school' grocers) and a number of other factors are contributing to this market share loss. We are at the beginning stages of a seismic shift in food retailing. Few have touched on the primary reason, and all that flows from that: Leaders in the traditional food retailing channel are for the most part lickspittles and dinosaurs. If that doesn't change quickly supermarkets will be traveling the route of the drive-in theaters.

on Aug 30, 2012

We are seeing a growing trend in many areas of retail that focus on the "convenience factor". This makes sense considering the instant world we live in... the shift is necessary
In years past life was much slower consumers would sit down and read the paper.. today they read headlines with the flip of a finger. They used to pick up the phone to talk to one person now they talk to hundreds of people at once using only their thumbs..
The point is that consumers expect to accomplish more in less time, the shift in technology in personal lives has a ripple effect being seen in the real world. Innovation is key today for any business to survive.

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Julie Gallagher

Julie Gallagher’s delicious foray into coverage of the food industry was purely accidental. With a background in technology, she joined Supermarket News as associate editor of its Technology...

Liz Webber

Liz Webber is Senior Digital Manager at Supermarket News. She covers fresh foods for the magazine and creates multimedia, blog posts and other content for the website. She joined SN in August 2012.
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